Member Nations Balk At World Customs Organization IP Enforcement Push

[Note: the summary text of the Policy Commission session is now available here]
By Kaitlin Mara
Concerns ran high in some developing countries last week that their voices have been largely absent from a draft set of standards for heightened intellectual property enforcement advancing rapidly at the World Customs Organization.

With the draft standards sent early – and, some say, without mandate – to decision-making bodies at the WCO, the organisation looks poised to become the next major platform for debate on global enforcement of intellectual property, as members discuss the possibility of incorporating IP protection into customs law. The report of the SECURE Working Group was available here. [Editor’s Note: This document, the report of the SECURE Working Group, has been taken down at the request of the WCO, which asserted copyright protection.]

A critique of the document [pdf] – signed by Argentina, Brazil, China, Cuba, Ecuador, and Uruguay – was sent to the WCO secretariat, saying the document not only misconstrues the state of play of a working group leading the process, but also “departs from the member-driven nature that should guide the process.”

A separate set of recommendations [doc] from the same group of key developing nations – excepting China, but with the added support of Bolivia, Chile, Colombia and Costa Rica – suggests the WCO Council (the organisation’s decision-making body) hold off on making any decisions regarding the draft standards until the working group has explicitly agreed upon terms of reference and developing countries have had time to assess the standards.

The two communications were intended to influence the decision of the WCO Commission (which can make recommendations to the Council, but has no decision making power), according to a source from one of the signatory countries. They seem to have succeeded.

As of Monday, the Commission had decided to recommend the draft standards be sent back for further work. However, Michael Schmitz of the WCO emphasised that this was “irrelevant” to the final decision, and that the Council would have the opportunity to accept, reject, or modify the recommendation during its meetings this week. The WCO has two meetings this week in Brussels, the first of its Commission from 23 to 25 June and the second of the Council on 26 to 28 June. These are annual governance meetings.

SECURE Working Group and TRIPS-Plus-Plus

The WCO tool SECURE (Standards to be Employed by Customs for Uniform Rights Enforcement) is tasked with building a set of standards, procedures, and best practices that will coordinate “global effort to suppress all kind of intellectual property rights infringements,” according to the WCO website. Its working group has met three times since its first meeting in October 2007 trying to draft a set of voluntary standards designed to guide customs offices in stopping piracy and counterfeiting when it hits the border.

The WCO says that its members recognise a “major role” of customs administrations in protecting IP and that the organisation should make “every effort” to do so.

Susan Sell, director of the Institute for Global and International Studies at the Elliott School of International Affairs in Washington, DC, said in a recent paper (available here [pdf]) that the SECURE aims were “TRIPS-plus-plus,” referring to extending beyond the scope of the 1994 World Trade Organization Trade-Related Aspects of Intellectual Property Rights Agreement (TRIPS). “These new anti-counterfeiting and enforcement initiatives are just the latest mechanisms to achieve the maximalists’ abiding goal of ratcheting up IP protection and enforcement worldwide,” she said.

Viviana Muñoz Tellez of the intergovernmental South Centre said in the South Centre Bulletin (16 April 2008 issue [pdf]) that the SECURE working group seems to be “setting new standards of intellectual property enforcement through the back door,” and that this “may extend beyond the WCO mandate.” Separately, she told Intellectual Property Watch that standards presented as voluntary could become mandatory down the line. “Soft law,” she said in the article, “is often the basis on which ‘hard law’ is later established.”

A WCO spokesperson explained that terms of reference with WCO working groups are often developed over time, as opposed to before work is started.

One of the specific issues Sell cites as most worrying is that the provisions would extend the scope of monitoring of IP violations to goods being exported as well as goods in transit or in warehouses (TRIPS only requires monitoring on imported goods).

A copy of the draft provisions obtained by Intellectual Property Watch shows brackets (that is, disagreements) remain on the issue of extending violation monitoring to exported and in-transit goods, but this is not comforting to those who seek further review of the already unbracketed text.

Other concerns of Sell’s are that the standards would extend monitoring to all IP, as opposed to just trademark and copyright, and would free IP rights holders from the burden of providing evidence that there is infringement “initiate a procedure.”

“The whole document is open until all issues are agreed upon,” said a source in the Brazilian government, adding that the text as it stands is not ripe for approval even in partial form.

Doubts About Inclusiveness of Participants

Formally, every member state of the WCO is allowed to participate in meetings of the SECURE working group. But in practice, this has not been the case. The response document to SECURE’s draft standards claims the standards document “was produced without previous consultation to the members of the organisation and therefore, at best, reflects the positions and intentions of the secretariat regarding the actions to be taken with respect to the document.”

Muñoz’s article expressed concern that among developing nations “only Brazil is actively engaged in the SECURE Working Group discussions.”

A developing country source told Intellectual Property Watch that developing nations had not thought of customs issues as potentially being used to enforce IP rights. It was developed countries that see WCO as a platform, perhaps because of frustration in getting desired protection mechanisms through the World Intellectual Property Organization, the source added.

The Brazilian source echoed that view, saying that Brazil only realised what was happening in the second meeting of the SECURE working group, as there was “no expectation of WCO taking on IP negotiations.”

Remaining brackets in the text – for instance, a footnote defining the standards as “voluntary” and not prejudiced against flexibilities in IP enforcement provided by TRIPS or the WIPO Development Agenda and a new standard that would protect existing legislation on biodiversity and traditional knowledge – were the result of that realisation and subsequent action, said the source.

But groups like the European Union (supporters of strong IP regimes) had been active in the working group from the beginning, however, the source added. Spokespeople for European customs did not respond to requests for comment as of press time.

The short staffing of developed country missions in Europe also was cited as a reason for low participation by several sources, who said it is very difficult for a small staff to cover al the activity in both Brussels and Geneva.

However, a WCO source noted that all those who have signed on in support [pdf] of the SECURE standards are developing nations.

Private Sector at the WCO?

There also was substantive concern that rights holders, such as industry trade associations, were participating in WCO meetings at the same level as member states, to the extent of having their own vice-chair. Muñoz’s article characterised their involvement as “on equal footing” with members, and said they can “equally suggest draft language.”

Schmitz said that the private sector members were only observers, though it is true that there is a vice-chair for industry. The SECURE working group allows for both private sector and accredited observers, but neither is allowed voice in consensus, Schmitz said, adding that that included the vice chair. The right to have a voice in consensus is reserved only for customs officers of member states, he emphasised.

“We’ve been very open with the public,” he added, about the allowance of private sector stakeholders in the meetings. What is unique about the way that WCO meetings are run is that observers may speak and express opinions once members have spoken. This is in contrast to the WTO and WIPO, where observers generally only offer comment if asked to, or with express permission of a meeting chair.

A source who had been at the meetings said “truth is in practice” and questioned whether such divisions between observer and member were significant, when observers are sitting at the main discussion tables and actively participating in the meeting’s discussions.

Kaitlin Mara may be reached at kmara@ip-watch.ch.